Raffles Medical chair ups stake following H1 2022 results

FOR the 5 trading sessions that spanned Jul 29 to Aug 4, the Straits Times Index (STI) gained 1.5 per cent, with the FTSE China A50 Index declining 3.2 per cent, the Hang Seng Index falling 2.5 per cent and the FTSE Bursa Malaysia KLCI adding 0.9 per cent.

Overall, institutions were net buyers of Singapore stocks over the 5 sessions with S$156 million of net inflows, following on from S$111 million of net outflow for the preceding 5 sessions.

OCBC, : O39 0% Singapore Airlines, : C6L 0% DBS, : D05 0% CapitaLand Integrated Commercial Trust, : C38U 0% and Keppel Corporation : BN4 0% led the net institutional inflows for the 5 sessions through to Aug 4.

Meanwhile, UOB, : U11 0% Singtel, : Z74 0% Yangzijiang Shipbuilding, : BS6 0% ST Engineering : S63 0% and NetLink NBN Trust : CJLU 0% led the net institutional outflows for the same period.

Share buybacks

There were 6 primary-listed stocks conducting share buybacks over the 5 sessions ended Aug 4, with a total consideration of S$26.5 million, up sharply from the S$1.2 million filed for the preceding 5 sessions.

Keppel Corporation, OCBC and Japfa : UD2 0% led the consideration tally. Keppel bought back 2,756,000 shares at an average price of S$6.98 per share. On the current mandate, Keppel has bought back 1.80 per cent of its issued shares (excluding treasury shares).

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On Jul 28, Keppel Corp reported an overall H1 2022 net profit of S$498 million, an increase of 66 per cent over the previous year, underpinned by profitability across all segments including the discontinued offshore & marine operations.

Excluding the discontinued operations, the group’s net profit from continuing operations in H1 2022 was S$434 million, or 26 per cent higher from H1 2021, bolstered by recurring income which grew 43 per cent to S$202 million.

During the H1 2022 results webcast, Keppel maintained that one of the original intentions of the S$500 million buyback programme (announced in January) was to have adequate cash for potential merger and acquisition transactions, particularly involving founders’ platforms.

Management noted that it may achieve better alignment with the founders where the company pays partly in cash, partly in shares and the share buyback is partly to fund that, and to fund its share plans at Keppel Corporation.

Director and substantial shareholder transactions

The 5 trading sessions saw close to 70 changes to director interests and substantial shareholdings filed for more than 30 primary-listed stocks.

This included 5 company director acquisitions with one disposal filed, while substantial shareholders filed 6 acquisitions and 6 disposals.

Raffles Medical Group

Between Aug 1 and 2, Raffles Medical Group (RMG) : BSL 0% executive chairman and non-independent director Loo Choon Yong acquired 353,800 shares of the private healthcare provider for a consideration of S$435,484. At an average price of S$1.23 per share, this increased his direct interest from 10.82 per cent to 10.84 per cent. Dr Loo’s total interest in RMG is 53.16 per cent, which has gradually increased from 51.93 per cent at the end of 2014.

His preceding acquisition was on Mar 23, with 500,000 shares acquired at S$1.14 per share.

Dr Loo jointly founded 2 RMG clinics in 1976 with Dr Alfred Loh. RMG has since consistently grown over the years to serve more than 2 million patients and 7,000 corporate clients each year.

Prior to the Aug 1 market open, RMG reported H1 2022 group revenue of S$382.3 million, representing 11.2 per cent growth from H1 2021.

Attributed to the return of patients to its clinics, the H1 2022 healthcare division revenue of S$255.6 million was up 24.1 per cent from H1 2021. At the same time, revenue from the hospital services division, decreased to S$151.8 million, down 11.4 per cent from H1 2021, due to a decrease in the number of Covid-19 PCR diagnostic tests.

With revenue growth outpacing growth of staff costs, the group’s H1 2022 profit after tax at S$60.0 million represented 54.4 per cent growth from H1 2021. As of Jun 30, 2022, the group also remained in a net cash position with S$288.0 million in cash.

With the results, Dr Loo highlighted that RMG, having continued to build capabilities in the past year, is well-positioned to serve returning international and local patients as pandemic measures ease. The executive chairman added that the group was pleased that its patients continue to trust the Raffles brand of quality healthcare services, and that the group will continue to innovate to serve their evolving holistic healthcare and wellness needs.

On the Covid-19 front, RMG noted that with a high proportion of Singapore residents already fully vaccinated, the group’s Covid-19 support activities in the areas of stand-alone vaccination and PCR test centres have tapered off.

The group added that it continues to support the government in operating combined testing and vaccination centres in 2 locations in Singapore and in addition, it will continue to offer step-down Covid-19 care service in the community treatment facilities that it operates.

RMG further noted that while the group’s operations in China were impacted by lockdowns, it had received approval to set up an in-vitro fertilisation/assisted reproductive therapy centre at Le Cheng, Hainan, China. This facility will complement its 3 existing China hospitals’ offerings through forming a full life-cycle service chain within its obstetrics and gynaecology practices for its patients across China, targeted to serve the estimated 40 million women in China who may require reproductive fertility services.

First Sponsor Group

Between Aug 3 and 4, First Sponsor Group : ADN 0% alternate director to the non-executive chairman, Ho Han Khoon, acquired 200,000 shares of the listed company for a consideration of S$250,800. At S$1.25 per share, this increased his total interest in the company from 31.43 per cent to 31.45 per cent.

On Jul 29, First Sponsor Group reported a H1 2022 net profit of S$71.3 million, representing 3.5 per cent growth from H1 2021, with the group also gaining 2 new residential development projects In Dongguan in July 2022.

Ho’s recent acquisitions followed similar acquisitions following the H1 2021 results, when he acquired 195,000 shares at S$1.40 per share.

Ho was appointed an alternate director to Calvin Ho Han Leong on May 19, 2014. He is currently holding the position of executive vice-president of Tai Tak, where he is responsible for overseeing Tai Tak group's overall business and financial strategy, investments and operations.

Baker Technology

On Aug 2, Baker Technology : BTP 0% executive director Benety Chang acquired 132,000 shares of the company at an average price of 44.9 cents per share. With a consideration of S$59,275, this increased his total interest in the company from 52.96 per cent to 53.02 per cent.

Prior to this he had acquired 82,300 shares at 43.9 cents per share on May 4 and 279,000 shares at 44.8 cents per share on Mar 9.

As the major shareholder of the company, Dr Chang has extensive experience in the offshore oil and gas industry.

On Jul 29, Baker Technology reported H1 2022 group revenue of S$47.1 million, which represented a 55 per cent increase from H1 2021, primarily due to higher fabrication revenue and charter revenue on improved operating conditions in the marine offshore industry.

The group also noted that it benefited from its 54.98 per cent-owned subsidiary, CH Offshore, achieving marginal profits in H1 2022 compared to a net loss in H1 2021 primarily due to better vessel utilisation; and higher foreign exchange gains in the current period as the US dollar strengthened by about 3.0 per cent against the Singapore dollar in H1 2022 compared to about 1.7 per cent in H1 2021.

Asian Pay Television Trust

On Jul 28, non-executive director and vice-chair of the trustee-manager of Asian Pay Television Trust (APTT), : S7OU 0% Lu Fang-Ming, acquired 330,000 units of the business trust for a consideration of S$38,940. At an average price of 11.8 cents per unit, this increased Lu’s total interest in APTT from 1.04 per cent to 1.06 per cent.

His preceding acquisitions were on Jul 14 with 300,000 units acquired at 12.2 cents per unit, and between Sep 23 and 27, 2021 with 1,888,400 units acquired at 13.0 cents per unit.

Lu has also been a corporate executive vice-president of Hon Hai/Foxconn Technology Group since the ODM manufacturing company he co-founded was acquired by Hon Hai/Foxconn Technology Group in May 2000.

APTT will announce its results for Q2 2022 and H1 2022, as well as the distribution for the quarter ended Jun 30, before the start of market trading on Aug 12.

The writer is the market strategist at Singapore Exchange (SGX). To read SGX’s market research reports, visit sgx.com/research.